Limited Liability Company Equity Interest Pledge and Security Agreement



 Exhibit 10.6 
 LIMITED LIABILITY COMPANY EQUITY INTEREST PLEDGE AND SECURITY AGREEMENT 
 THIS LIMITED
LIABILITY COMPANY EQUITY INTEREST PLEDGE AND SECURITY AGREEMENT (the “Agreement”) is made and entered into effective as of the 26th day of June, 2008, by and between Nexxus Lighting, Inc., a Delaware corporation (the “Pledgor”)
and Jay Weil, as collateral agent (“Collateral Agent”) for the secured parties (“the Secured Parties”) pursuant to that certain Collateral Agent Agreement, dated of even date herewith, among Pledgor, Collateral Agent and the
Secured Parties (the “Collateral Agent Agreement”). 
 BACKGROUND 
 A. Pursuant to that certain Note and Warrant Purchase Agreement, dated of even date herewith, between the Company and the purchasers set forth on
Schedule I thereto (the “Purchase Agreement”), the Pledgor is selling, and the Secured Parties are purchasing, Secured Promissory Notes Due December 2009 in the aggregate principal amount not to exceed $3,500,000 (the “Notes”).

 B. In order to secure the timely payment and performance of the Notes, the Pledgor desires to grant the Secured Parties a
first-in-priority, perfected and continuing security interest in 100% of the equity interests (the “Interests”) of Advanced Lighting Systems, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Pledgor
(“ALS”). 
 C. The continuing security interest in the Interests shall be evidenced by this Agreement. Capitalized terms used, but
not defined, in this Agreement have the meanings set forth in the Purchase Agreement. 
 NOW, THEREFORE, for and in consideration of the
mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 AGREEMENT 
 1. Recitals and Defined
Terms. The parties hereto acknowledge that the aforementioned recitals are true and correct and agree that such recitals, together with the definitions set forth therein and in the preamble to this Agreement, are hereby incorporated into this
Agreement by this reference. 
 2. Additional Interests. All references to the Interests shall be appropriately adjusted to reflect
any split, distribution, recapitalization or other similar arrangement affecting the Interests after the date of this Agreement. In the event that the Pledgor receives, or becomes entitled to, any property (whether real or personal, tangible or
intangible) in connection with or related to the Interests in any way, then any such property shall be considered Interests under this Agreement. 
 3. Creation of Security Interest. Pledgor hereby affirms, acknowledges, ratifies, grants and assigns in favor of the Secured Parties a first, prior and sole lien and security interest (the “Security Interest”) in the
Interests and in all accessions, substitutions, replacements and proceeds thereof, including without limitation, whether by law, merger or exchange, to secure 








 
the Obligations (as defined below). Pledgor hereby warrants and represents to the Secured Parties that the Interests are owned by the Pledgor free and clear
of any liens, charges or encumbrances other than those imposed by securities laws and this Agreement. The equity interest of the Pledgor comprising the Interests is 100% of the entire equity ownership of ALS, which is owned of record and
beneficially by Pledgor. Such ownership interest is uncertificated. Upon execution of this Agreement, Pledgor shall deliver a copy of ALS’ operating agreement to the Collateral Agent. 
 For purposes of this Agreement the term “Obligations” shall mean: (a) all indebtedness, liabilities and obligations of Pledgor to the
Secured Parties under the Notes, and any note or notes hereafter issued in substitution or replacement thereof, (b) all obligations of the Pledgor under this Agreement and (c) in the foregoing cases whether due or to become due, and
whether now existing or hereafter arising or incurred. 
 4. Delivery. Simultaneously with execution hereof, Pledgor shall execute and
deliver to the Collateral Agent a UCC-1 Financing Statement(s) for filing in the State of Delaware evidencing the first security interest granted by Pledgor to the Secured Parties in the Interests. The Pledgor agrees that, at any time and from time
to time, Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be reasonably necessary or desirable, or that the Collateral Agent may reasonably request, in order to perfect and
protect any security interest granted hereby or to enable the Secured Parties or the Collateral Agent to exercise and enforce their rights and remedies hereunder with respect to the Interest. 
 5. Proxy. Pledgor hereby irrevocably constitutes and appoints the Collateral Agent, whether or not the Interests have been transferred into the
name of the Secured Parties, as the Pledgor’s proxy, with full power to (a) attend meetings concerning the Interests held after the date of this Agreement and, to vote the Interests at those meetings in such manner as the Collateral Agent
shall, in his sole and absolute discretion, deem appropriate, (b) consent, in the sole and absolute discretion of the Collateral Agent, to any action by or concerning Pledgor for which consent of the members of ALS is or may be necessary or
appropriate, and (c) do all things that Pledgor could do as a securities holder of ALS, giving and granting unto the Collateral Agent full power of substitution and revocation. Notwithstanding the provisions contained in the preceding sentence
(hereinafter referred to as the “Proxy Rights”), neither the Collateral Agent nor the Secured Parties, or any of them, shall have the right to perform, exercise, take or assert any of the Proxy Rights unless and until there shall have
occurred an Event of Default (as that term is defined below). Except upon the occurrence and during the continuation of an Event of Default, Pledgor shall be entitled to exercise any and all voting and/or consensual rights and powers accruing to an
owner of the Interests or any part thereof for any purpose. Pledgor hereby revokes all proxies heretofore given and agrees not to grant any proxy to any person or persons with respect to the Interests other than as granted herein for so long as this
Agreement is in force. 
 6. Ordinary Care by the Secured Parties. The Secured Parties and/or the Collateral Agent shall use ordinary
care in the custody and preservation of the Interests in their possession. 
  

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 7. Event of Default. An event of default shall occur upon the happening of any of the following
(each, an “Event of Default”): 
 (a) Default by Pledgor in the performance of any of the Obligations after receipt
by Pledgor of notice in writing of such default (including, a brief description of the nature of the default) and failure by Pledgor to cure such default within thirty days after the receipt of such notice; 
 (b) An Event of Default under the Notes; or 
 (c) The transfer or encumbrance, by any means, of any interest in the Interests other than in favor of the Secured Parties. 
 8. Remedies. Upon the occurrence and during the continuation of an Event of Default, the Secured Parties may, at their option, without notice to or demand upon the Pledgor, take the Interests in the Secured
Parties’ own names, on a pro rata or any other basis agreed to by the Secured Parties, and dispose of that portion of the Interests as may be necessary to satisfy the Pledgor’s Obligations, including, without limitation, the outstanding
principal amount of the Notes and all accrued interest thereon (as provided in the Notes). In addition to the rights and remedies provided for herein, or otherwise available to the Secured Parties, the Secured Parties (and the Collateral Agent
acting on their behalf) shall have all the rights and remedies of a secured party under the Uniform Commercial Code (“UCC”) in effect in the State of Delaware at the time, including the right to sell the Interests at public or private sale
as provided by and in accordance with the UCC. 
 9. Covenants of Pledgor. During the term of this Agreement: 
 (a) Pledgor shall not sell, assign, transfer, hypothecate, or otherwise dispose of the Interests, or any interest therein, encumber the
Interests or any interest therein, or contract to do any of the foregoing; and 
 (b) Pledgor shall not take any action with
respect to the Interests that is inconsistent with the provisions or purpose of this Agreement or that would adversely affect the rights of Secured Parties or the Collateral Agent under this Agreement. 
 10. Collateral Agent. The rights of the Secured Parties in the Interests will be exercisable by Collateral Agent as agent for Secured Parties
pursuant to the Purchase Agreement. In such capacity, from time to time and at any time, Collateral Agent may in his sole discretion take any and all actions, exercise any and all rights and remedies, give any and all waivers and forbearances, and
make any and all determinations and elections that the Secured Parties are entitled to exercise under this Agreement and the Notes. Pledgor will be entitled to rely solely on the actions of Collateral Agent as binding all Secured Parties.

 11. Termination of this Security Interest and Agreement. This Agreement and the Security Interest created hereby shall terminate
immediately on the satisfaction of all of the Company’s Obligations and the Collateral Agent shall immediately thereafter return to the Pledgor all certificates (if any), and related powers, with respect to the Interests directly or indirectly
in his possession or control and file a UCC termination statement with respect to the Security Interest in the Interests. 
  

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 12. Miscellaneous Provisions. 
 (a) Interpretation. This Agreement will be interpreted in accordance with, and subject to the provisions of, the Purchase Agreement
applicable to all Transaction Documents. Without limiting the foregoing, this Agreement is governed by Delaware law. 
 (b)
Effect of Invalidity of Particular Provisions. The unenforceability or invalidity of any provision or provisions of this Agreement shall not render any other provision or provisions herein contained unenforceable or invalid. 
 (c) Cumulative Rights, Powers and Remedies. The rights, powers and remedies given to the Secured Parties by this Agreement shall be
in addition to all rights, powers and remedies given the Secured Parties by virtue of any statute or rule of law. 
 (d)
Waiver. Any forbearance, failure, or delay by the Secured Parties in exercising any right, power or remedy under this Agreement shall not be deemed to be a waiver of such right, power or remedy, and any single or partial exercise of any
right, power or remedy, under this Agreement shall not preclude the further exercise thereof; and every right, power and remedy of the Secured Parties shall continue in full force and effect until such right, power or remedy is specifically waived
by an instrument in writing executed by the Collateral Agent. 
 (e) Binding Effect. All of the terms, covenants,
warranties and representations contained herein shall be binding upon the parties, their heirs, successors and assigns. 
 (f)
Entire Agreement. This Agreement, the Notes, the Purchase Agreement and the other Transaction Documents entered into by and between the parties hereto and thereto constitute the entire agreement between the parties with respect to the subject
matter of this Agreement, and supersede all agreements, representations, warranties, statements, promises and understandings not specifically set forth herein or therein. No party hereto has in any way relied, nor shall in any way rely, upon any
oral or written agreements, representations, warranties, statements, promises or understandings not specifically set forth herein. 
 (g) Amendments. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the Pledgor and the Collateral Agent. 
 (h) Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning
hereof. 
 (i) Further Assurances. The parties hereto agree that they shall sign such additional and supplemental
documents to implement the transactions contemplated pursuant to this Agreement when requested to do so by any party to this Agreement. 
 (j) Counterparts. This Agreement may be executed in counterparts, each of which shall be regarded as the original and all of which shall constitute one and the same Agreement. 
  

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 13. Representations, Warranties and Covenants of Pledgor. The Pledgor represents, warrants and
covenants to the Secured Parties as follows: 
 (a) Pledgor is the record and beneficial owner of, and has good and marketable
title to, the Interests pledged hereunder, free of any and all liens, charges, encumbrances and security interests of every kind and nature (other than the lien created by this Agreement); 
 (b) Pledgor has good right and legal authority to pledge the Interests owned by it in the manner hereby done or contemplated; 

(c) No authorization, approval, or other action by, and no notice to or filing with, any third party, governmental authority or
regulatory body is required for the validity of the pledge by Pledgor of the Interests pursuant to this Agreement or for the execution, delivery or performance of this Agreement by Pledgor; 
 (d) This Agreement constitutes the legal, valid and binding obligation of Pledgor and the pledge effected hereby is effective to vest in
the Secured Parties their rights in the Interests as set forth herein. 
 All representations, warranties and covenants made by Pledgor contained in this
Agreement shall survive the execution, delivery and performance of this Agreement until the termination of this Agreement. 
 IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first written above. 
  

			
	NEXXUS LIGHTING, INC.
		
	By:	 	/s/ John C. Oakley
	Name:	 	John C. Oakley
	Title:	 	Chief Financial Officer
	
	COLLATERAL AGENT:
	
	/s/ Jay Weil
	Name: Jay Weil


  

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